IESBA proposes ethical standards for ESG reporting and assurance
Standards will prevent greenwashing and foster trust in corporate disclosures, says body’s chair
The body in charge of accounting conduct has proposed standards for ESG reporting and assurance.
The International Ethics Standards Board for Accountants (IESBA) issued two exposure drafts today, outlining what it calls “the first comprehensive suite of global standards on ethical considerations in sustainability reporting and assurance”.
IESBA develops global expectations for how accountants should conduct themselves on issues of ethics or professionalism. Its existing code of ethics for financial reporting and assurance is used in 130 jurisdictions, either as legislation or a reference framework.
The International Accreditation Forum has said today that it plans to stipulate to national accreditation bodies that IESBA’s latest proposals are used when accrediting and authorising bodies to carry out assurance work on corporate sustainability disclosures.
IESBA’s chair, Gabriela Figueiredo Dias, told Real Economy Progress that the standards were about “ensuring the people preparing and assuring sustainability reports behave with integrity, objectivity and independence”.
They tackle issues such as conflicts of interest, personal biases and pressure from clients.
“The majority of greenwashing comes from behaviour – someone does something that he or she shouldn’t do, or reports or assures information that doesn’t reflect reality,” said Figueiredo Dias. “So these standards are about preventing the profession and other providers from contributing to greenwashing, and contributing to high-quality sustainability information.”
Alan Johnson, chair of the International Accounting and Auditing Standards Body, which is developing technical standards for sustainability reporting and assurance, said IESBA’s plans marked “a significant step towards ensuring that sustainability disclosures are ethically grounded and universally trusted”.
The chair of the Board of the International Organization of Securities Commissions (IOSCO), Jean-Paul Servais, also welcomed the proposals in a statement today.
IESBA is calling for feedback from sustainability professionals, accountants, regulators and investors between now and May.
Once finalised, the new code of ethics will be incorporated into the organisation’s financial code, making it likely that any country that already mandates the code – such as the UK – will automatically adopt the sustainability component.